Presentation Chapter 9

Presentation Chapter 9 - External Auditors Roles and...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: External Auditors Roles and Responsibilities Chapter IX Chapter Objectives: Recognize the role independent auditors play in achieving effective corporate governance and reliable Key Terms The Accountancy Investigation & Discipline Board (AIDB) Audit quality Audit risk Audit strategy Auditor independence Control risk Detection risk Expectation gap Inherent risk Integrated audit approach Internal Revenue Service (IRS) International Standards on Auditing (ISAs) PCAOB-US Professional Ethics Executive Committee (PEEC) Standing Advisory Group (SAG) Statements on Auditing Standards External Auditing and Corporate Governance External Auditor Responsibility Current auditing standards require that independent auditors provide reasonable assurance that the financial statements are free from material misstatements, whether caused by error or fraud, to render an unqualified opinion on the financial statements. External auditors are not and should not be expected to provide absolute assurance regarding reliability of financial statements, but the public expectations concerning external auditors performance are high. Users of audited financial statements generally expect external auditors to detect financial statement fraud and employees illegal acts and fraud, which affects the integrity of financial reports. External auditors, however, are more concerned with material misstatements in the audited financial statements. Auditor Competency 1. Professional competencies. To audit public companies, auditors should register with the PCAOB and meet all registration and inspection requirements. 2. Technical competencies. Auditors should be knowledgeable in professional standards, rules, laws and regulations, and understand their clients industry and business, corporate governance, financial reporting process, and internal controls. 3. Process competencies. Auditors ability to choose appropriate evidence-gathering procedures (tests of controls, substantive tests) and execute auditing procedures 4. Reporting competencies. Reporting competencies refer to the auditors ability and willingness to discover and report material misstatements. Reports Accompanying Financial Statements Report on financial statements and related disclosures (prepared by auditor) Are financial statements and disclosures according to GAAP? Report on internal control over financial reporting (prepared by management) Has company maintained effective internal control over financial reporting? Report on internal control over financial reporting (prepared by auditor) Is managements assessment of its internal control appropriate? Has company maintained effective internal control over financial reporting? The Purpose of the Audit Report Definition of auditing: ... communicating results to interested users. Indicate whether the FS are in accordance with GAAP Provide indication of what the FS would be like if GAAP were followed Provide any company-omitted disclosures...
View Full Document

This note was uploaded on 03/08/2012 for the course ACCT 7050 taught by Professor Razai during the Fall '11 term at U. Memphis.

Page1 / 63

Presentation Chapter 9 - External Auditors Roles and...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online